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| PLAY > New Plays |
Sunday, April 29, 2001 |
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New Split Plays
None
New Candidate Plays
| AYE - Allegheny Energy, Inc. $50.60 (+3.45)
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Allegheny Energy, Inc. is a diversified utility holding company that provides electric generation and distribution services in Maryland, Ohio, Pennsylvania, Virginia and West Virginia. The stock has performed well over the past year after hitting a 4-year low of $23.62 on 3/10/00. On Friday, shares of AYE hit an all-time high of $51.30, representing a 117% gain from the low. The stock has posted gains in the last four sessions following its earnings announcement on Monday evening. On Thursday night, the company sold 12.4 million common shares in a stock offering at $48.25 per share, raising $598.3 million in gross proceeds. We believe that AYE could continue to trend higher now that it has cleared the earning announcement and the stock offering. We are also looking for a stock split out of the Annual Meeting on May 10th. The company already has enough shares for a split with 260 million shares outstanding and 123 million shares issued. Going forward, AYE has support at Thursday's intra-day high of $49.20 with stronger support at $48.17, the 10-dma. Resistance is currently at Friday's intra-day high of $51.30 and then possibly $53. Traders may consider opening new positions on a bounce off of $49.20 or a breakout above $51.30 on volume greater than 300,000 shares by noon. We plan to place stops at $47 as downside protection.
| TTC - Toro Company $46.25 (+2.15)
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Beautiful weather across the country is probably having people dreaming of barbecues and pool parties. However, spring and summer also bring another warm weather activity to mind, cutting the grass. This ties right into our new play, Toro. TTC is an excellent seasonal play, due to its huge line of lawn and gardening equipment. Additionally, Toro is a huge beneficiary of the boom in golf course construction. Toro's top of the line products serves to keep a multitude of golf courses across the country looking in tiptop shape. The company's fundamentals are also solid. Toro is expected to show profits of $2.29 this quarter when it reports earnings on May 23rd. Despite the company's solid earnings, it only trades at a trailing P/E of 13.21. Turning to the chart, TTC has been building a symmetrical triangle over the last two months and has just broken to the upside. Major support can be found at the 50-DMA of $43.94 (just above our initial stop of $43.50). TTC may accelerate once it surpasses the $47.00 resistance level. Traders might be interested in picking up this stock if it can make this move accompanied by midday volume of over 50,000 shares. The next resistance level after that is $47.65 (the all time high). The MACD just turned positive last week, which is a good sign that TTC is on the verge of making another foray into new high territory. The Money Flow and OBV are also both solid and the RSI has plenty of room before an overbought condition is signaled. We our placing our initial stop at $43.50 to lower our downside risk.
New Momentum Plays
None
New Plays Index
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